The Brains Trust, page-3818

GJ, ok I'll have a STAB at one idea there.

Article is attached where Elon Musk argues his price is over-valued. http://www.zerohedge.com/news/2017-...s-market-cap-higher-we-have-any-right-deserve

My view is that Telstra is not a disruptor at all, and simply an early adopter of new technology. That is, Tesla EV is not attempting to change the business model of individual cars sold to private and fleet buyers. It is just the next generation of technology, much like ashtrays have given way to usb ports in cars these days, and dashboard dials have gone electronic like a video game.

The implications of that insight is that he is using a next generation technology to get a position as a car manufacturer, a capital intensive, low margin industry. His real skill being an ability to lobby governments for grants on environmental grounds and sell a concept to public shareholders who want to save the world.

But in business its not always best to be an early mover. Established car companies have been able to keep pumping out petrol vehicles whilst sitting back and letting Tesla try to commercialise and popularise the EV technology, batteries, suppliers (Lithium, Cobalt etc), recharging stations etc. Once they can see the new technology getting traction, with appropriate lead time, can bring on their own vehicles and crush Tesla with their bigger capital, infrastructure and volume.

In fact EV's may be a reviver of the big carmakers as they can move on from old petrol models and get a fresh start with new branding and also force upgrades on existing car owners. So at a point of critical mass carmakers will be able to accelerate the redundancy of petrol models and force early upgrades to their EV models.

Teslas best strategic move in my view would be to become a EV battery supplier only to all the major car companies. This is a new space in which they could specialise and lead. Otherwise if they dont refocus we could run a longer term competion on this forum as to how long Tesla will last before going bust.